NewsHP Looks to Dump Personal Systems Group, Kill webOS

HP Looks to Dump Personal Systems Group, Kill webOS

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Today comes the surprising news that HP is looking to divest its personal systems group and will shut down its webOS group.

Here is what HP had to say in their press release:

HP today commented on the recent announcement by Autonomy Corporation plc (LSE: AU.L). HP confirms that it is in discussions with Autonomy regarding a possible offer for the company.

HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.

In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.

According to this financial presentation from Q2, the personal systems group is a low-margin hardware supplier.  It is hard to see who would want to buy a 5% operating margin PC assembly business; we’ll have to see how that progresses.

The acquisition of Autonomy looks like a major transaction in the same class as Compaq or EDS.  It is a software company; initial valuation of $12 billion USD looks to be a premium over its $7 billion USD current market value.  Here is some feedback on Autonomy:

Founded in 1996 and utilizing a unique combination of technologies borne out of research at Cambridge University, Autonomy has experienced a meteoric rise. The company currently has a market cap of $7 billion, is the second largest pure software company in Europe and has offices worldwide. Autonomy is a global leader in infrastructure software for the enterprise that helps organizations to derive meaning and value from their information, as well as mitigate the risks associated with those same assets. Autonomy’s position as the market leader is widely recognized by leading industry analysts including Gartner, Forrester Research, IDC and Ovum.

Autonomy was founded upon a vision to dramatically change the way in which we interact with information and computers, ensuring that computers map to our world, rather than the other way around.

Human-friendly or unstructured information is not naturally found in the rows and columns of a database, but in documents, web pages, presentations, videos, phone conversations, emails and IMs. We are facing an increasing deluge of unstructured information, with 80% now falling into this category and, according to Gartner, the volume of this data doubles every month. As the amount of unstructured information multiplies, the challenge for the modern enterprise is trying to understand and extract the value that lies within this vast sea of data, whilst minimizing the risk.

Many companies believe that access to information is the answer to dealing with the unstoppable spread of information of all forms – if people can find information, they can process it themselves. Autonomy believes that although access to information is important, there is far greater value in forming an understanding of data and automatically processing it, freeing up people to focus on higher-value activities that computers are unable to do.

By providing a pan-enterprise software infrastructure that automates advanced operations, Autonomy presents customers with a compelling value proposition. With this ability, Autonomy enables organizations to penetrate their information silos, derive maximum value from their corporate assets, and boost productivity while minimizing the risks endemic to information proliferation.

The new management at HP is aggressively looking to put the accent on software and services.  These moves help advance that agenda.

We’ll bring you more information as we get it.

News Release froim HP

HP Q2 Earnings Presentation

Autonomy plc

Jim McCarthy
My tech interests include WHS, media streaming, and gaming, among others!

11 COMMENTS

    • Really is too bad as the product was quite nice. Best Buy Stateside is rumored to have almost 200k of them in stock. If the price drops, I might pick one up for my parents to use.

  1. The MediaSmart group was moved to WebOS last year when HP bailed on WHS. Bad luck for the employees who helped us with such a great product.

    • Andrew I suspect that the new CEO, who came from SAP, was interested in shifting gears. The rollput has not even completed yet as phones were slated for later in Q3! Best Buy is rumored to be looking to return about 85% of what they had bought of the TouchPads. Not a good situation.

      Jim

  2. According to what I have been reading on the Touchpads was lack of Apps. Even through it has been getting great critical praise the lack of Apps for the Touchpad kept the consumers from picking it up.

  3. Don’t we sound like a bunch of wet hens :)… Sure glad I don’t work for HP right now, I feel for the IT Department in the WebOS group that is getting the red headed step child treatment.

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